Middle East War and Rising Oil Prices Shake Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy MORN?
Source: CNBC
- Increased Market Volatility: Since the outbreak of the Iran war on February 28, the S&P 500 has fallen over 4%, while West Texas Intermediate futures have surged nearly 40%, indicating heightened sensitivity to geopolitical risks, necessitating cautious strategies from investors to mitigate potential losses.
- Tax Optimization Opportunities: In a declining market, investors can utilize Roth conversions to transfer assets from traditional IRAs to tax-free accounts, allowing for more shares to be moved at depressed values and enabling tax-free growth during market rebounds, particularly for growth-oriented stocks like those in the tech sector.
- Loss Harvesting and Rebalancing: Investors can sell down concentrated positions at lower tax costs to realize losses and redeploy proceeds, effectively reducing overall tax burdens while offsetting capital gains, with the ability to apply up to $3,000 in losses against ordinary income.
- Employee Stock Options Strategy: A market downturn can provide employees the chance to exercise stock options at favorable prices, potentially lowering their alternative minimum tax (AMT) liabilities due to smaller spreads, but this decision should be made in consultation with financial advisors to ensure it aligns with long-term investment goals.
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Analyst Views on MORN
Wall Street analysts forecast MORN stock price to rise
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 156.810
Low
250.00
Averages
285.00
High
320.00
Current: 156.810
Low
250.00
Averages
285.00
High
320.00
About MORN
Morningstar, Inc. is a provider of independent investment insights in North America, Europe, Australia, and Asia. Its segments include Morningstar Data and Analytics, PitchBook, Morningstar Wealth, Morningstar Credit, and Morningstar Retirement. The Morningstar Data and Analytics segment provides investors comprehensive data, research and insights, and investment analysis to empower investment decision-making. The PitchBook segment provides investors with access to a broad collection of data and research covering the private capital markets. Morningstar Wealth segment brings together its model portfolios and wealth platform; practice and portfolio management software for registered investment advisers; data aggregation and enrichment capabilities; and others. Morningstar Credit segment provides investors with credit ratings, research, data, and credit analytics solutions. The Morningstar Retirement segment offers products designed to help individuals reach their retirement goals.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Investment Opportunities Amid Nasdaq Correction
- Memory Chip Industry Growth: Micron Technology holds a significant position in the memory chip industry, and despite its stock being 23% below its high, the company reported nearly tripled revenue last quarter due to strong demand from data centers, highlighting its critical role in AI infrastructure development.
- Optimistic Earnings Forecast: Analysts expect Micron's adjusted earnings to grow 13% annually through fiscal 2029, making the current valuation of 16 times adjusted earnings reasonable, with a median target price of $550 per share implying a 56% upside from the current price of $352.
- Ad Tech Innovation: AppLovin's stock is 48% below its high, yet its newly launched self-service platform provides robust advertising technology support for e-commerce, with the CEO stating it serves as the foundation for the next decade of growth, showcasing the company's leading position in AI innovation.
- Undervalued Market Position: Despite facing short-term challenges, AppLovin's earnings are projected to increase by 44% annually through 2027, with the current valuation of 38 times earnings considered cheap; the median target price among 32 analysts is $650 per share, indicating a 71% upside from its current price of $380.
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Nasdaq Faces Correction Amid Rising Oil Prices
- Nasdaq Correction: The Nasdaq Composite index has corrected over 10% due to soaring oil prices, entering correction territory; however, historical data shows that the index has averaged a 22% return in the 12 months following such corrections, presenting a buying opportunity for investors.
- Micron Technology Outlook: Cantor Fitzgerald has set a target price of $700 per share for Micron Technology, implying a 98% upside from its current price of $352, with the company benefiting significantly from strong growth in the data center segment amid a memory chip supply shortage.
- AppLovin Growth Potential: Citigroup has set a target price of $820 per share for AppLovin, indicating a 115% upside from its current price of $380; despite concerns about AI disrupting traditional advertising models, the company is at the forefront of ad tech innovation.
- Industry Cyclicality Risks: Although Micron's stock is currently 23% below its historical high, analysts generally believe it is undervalued, with expectations of a 13% annual growth in adjusted earnings through fiscal 2029, making the current valuation of 16 times adjusted earnings appear reasonable.
See More
Investors Turn to Low Volatility Funds Amid Market Turbulence
- Strong Performance of Low Volatility Funds: The Franklin International Low Volatility High Dividend Index ETF (LVHI) has risen approximately 8% year-to-date, contrasting with the nearly 7% decline of the S&P 500, demonstrating its resilience during market turbulence.
- Significant Asset Management: LVHI currently manages $4 billion in assets, with a 30-day SEC yield of 3.35% and an expense ratio of just 0.40%, providing a stable income source that has attracted substantial inflows.
- International Diversification Strategy: LVHI reduces volatility by investing in international stocks while hedging currency risks; Silverman notes that these stocks are driven by different economic forces than traditional domestic stocks, offering a more defensive investment option.
- Risk Mitigation Tool: Silverman recommends viewing these ETFs as conservative core holdings within a portfolio, capable of balancing higher-risk assets, akin to safety features in race cars, helping investors manage portfolio volatility.
See More
Iran War Fuels Oil Prices, Heightens Inflation Concerns
- Surging Oil Prices: Since the onset of the Iran war, Brent crude futures have surged nearly 50% and West Texas Intermediate crude has risen 41%, which not only increases consumer fuel costs but also poses broader inflationary pressures that could hinder economic recovery.
- Rising Inflation Expectations: With rising energy and food prices, investors are increasingly concerned that inflation will remain above the Federal Reserve's 2% target, particularly affecting those nearing retirement who face eroding purchasing power, prompting a reassessment of portfolio strategies.
- Inflation-Protected Bonds: Treasury Inflation-Protected Securities (TIPS) have emerged as a tool for combating inflation, with inflows recorded in 12 out of the last 13 months, indicating strong demand from investors seeking asset protection, despite the inherent price volatility risks associated with these bonds.
- Active Commodity Market: In addition to rising oil prices, natural gas has increased over 4% since the war began, with broad commodity ETFs attracting $2 billion in inflows over the past three months, reflecting investor interest in the commodity market and expectations of future price volatility.
See More
Pop Mart Shares Plunge Over 20% Amid Growth Concerns
- Significant Revenue Growth: Pop Mart reported annual revenue of 37.1 billion yuan ($5.4 billion) for 2025, marking a 185% increase year-over-year, although slightly below LSEG's estimate of 38 billion yuan, indicating strong market performance but raising sustainability concerns.
- Dramatic Profit Increase: The company's net income surged more than fourfold to 12.8 billion yuan, slightly exceeding the forecast of 12.6 billion yuan; however, a notable slowdown in the fourth quarter heightened investor worries about the durability of its key IP's popularity.
- Underwhelming New Character Sales: While sales from Skullpanda more than doubled to 3.54 billion yuan, and Twinkle Twinkle and Hirono generated 2.06 billion yuan and 1.74 billion yuan respectively, Labubu and its family still accounted for 38% of total revenue, indicating insufficient market acceptance of new characters.
- Cautious Market Sentiment: Investors have expressed skepticism about Pop Mart's short-term appeal, with shares retreating about 50% from their August peak, reflecting a cautious sentiment towards the company's future growth, as the CEO acknowledged the need to diversify beyond Labubu to sustain growth.
See More
Middle East War and Rising Oil Prices Shake Stocks
- Increased Market Volatility: Since the outbreak of the Iran war on February 28, the S&P 500 has fallen over 4%, while West Texas Intermediate futures have surged nearly 40%, indicating heightened sensitivity to geopolitical risks, necessitating cautious strategies from investors to mitigate potential losses.
- Tax Optimization Opportunities: In a declining market, investors can utilize Roth conversions to transfer assets from traditional IRAs to tax-free accounts, allowing for more shares to be moved at depressed values and enabling tax-free growth during market rebounds, particularly for growth-oriented stocks like those in the tech sector.
- Loss Harvesting and Rebalancing: Investors can sell down concentrated positions at lower tax costs to realize losses and redeploy proceeds, effectively reducing overall tax burdens while offsetting capital gains, with the ability to apply up to $3,000 in losses against ordinary income.
- Employee Stock Options Strategy: A market downturn can provide employees the chance to exercise stock options at favorable prices, potentially lowering their alternative minimum tax (AMT) liabilities due to smaller spreads, but this decision should be made in consultation with financial advisors to ensure it aligns with long-term investment goals.
See More
Investment Opportunities Amid Nasdaq Correction
- Memory Chip Industry Growth: Micron Technology holds a significant position in the memory chip industry, and despite its stock being 23% below its high, the company reported nearly tripled revenue last quarter due to strong demand from data centers, highlighting its critical role in AI infrastructure development.
- Optimistic Earnings Forecast: Analysts expect Micron's adjusted earnings to grow 13% annually through fiscal 2029, making the current valuation of 16 times adjusted earnings reasonable, with a median target price of $550 per share implying a 56% upside from the current price of $352.
- Ad Tech Innovation: AppLovin's stock is 48% below its high, yet its newly launched self-service platform provides robust advertising technology support for e-commerce, with the CEO stating it serves as the foundation for the next decade of growth, showcasing the company's leading position in AI innovation.
- Undervalued Market Position: Despite facing short-term challenges, AppLovin's earnings are projected to increase by 44% annually through 2027, with the current valuation of 38 times earnings considered cheap; the median target price among 32 analysts is $650 per share, indicating a 71% upside from its current price of $380.
See More
Nasdaq Faces Correction Amid Rising Oil Prices
- Nasdaq Correction: The Nasdaq Composite index has corrected over 10% due to soaring oil prices, entering correction territory; however, historical data shows that the index has averaged a 22% return in the 12 months following such corrections, presenting a buying opportunity for investors.
- Micron Technology Outlook: Cantor Fitzgerald has set a target price of $700 per share for Micron Technology, implying a 98% upside from its current price of $352, with the company benefiting significantly from strong growth in the data center segment amid a memory chip supply shortage.
- AppLovin Growth Potential: Citigroup has set a target price of $820 per share for AppLovin, indicating a 115% upside from its current price of $380; despite concerns about AI disrupting traditional advertising models, the company is at the forefront of ad tech innovation.
- Industry Cyclicality Risks: Although Micron's stock is currently 23% below its historical high, analysts generally believe it is undervalued, with expectations of a 13% annual growth in adjusted earnings through fiscal 2029, making the current valuation of 16 times adjusted earnings appear reasonable.
See More
Investors Turn to Low Volatility Funds Amid Market Turbulence
- Strong Performance of Low Volatility Funds: The Franklin International Low Volatility High Dividend Index ETF (LVHI) has risen approximately 8% year-to-date, contrasting with the nearly 7% decline of the S&P 500, demonstrating its resilience during market turbulence.
- Significant Asset Management: LVHI currently manages $4 billion in assets, with a 30-day SEC yield of 3.35% and an expense ratio of just 0.40%, providing a stable income source that has attracted substantial inflows.
- International Diversification Strategy: LVHI reduces volatility by investing in international stocks while hedging currency risks; Silverman notes that these stocks are driven by different economic forces than traditional domestic stocks, offering a more defensive investment option.
- Risk Mitigation Tool: Silverman recommends viewing these ETFs as conservative core holdings within a portfolio, capable of balancing higher-risk assets, akin to safety features in race cars, helping investors manage portfolio volatility.
See More
Iran War Fuels Oil Prices, Heightens Inflation Concerns
- Surging Oil Prices: Since the onset of the Iran war, Brent crude futures have surged nearly 50% and West Texas Intermediate crude has risen 41%, which not only increases consumer fuel costs but also poses broader inflationary pressures that could hinder economic recovery.
- Rising Inflation Expectations: With rising energy and food prices, investors are increasingly concerned that inflation will remain above the Federal Reserve's 2% target, particularly affecting those nearing retirement who face eroding purchasing power, prompting a reassessment of portfolio strategies.
- Inflation-Protected Bonds: Treasury Inflation-Protected Securities (TIPS) have emerged as a tool for combating inflation, with inflows recorded in 12 out of the last 13 months, indicating strong demand from investors seeking asset protection, despite the inherent price volatility risks associated with these bonds.
- Active Commodity Market: In addition to rising oil prices, natural gas has increased over 4% since the war began, with broad commodity ETFs attracting $2 billion in inflows over the past three months, reflecting investor interest in the commodity market and expectations of future price volatility.
See More
Pop Mart Shares Plunge Over 20% Amid Growth Concerns
- Significant Revenue Growth: Pop Mart reported annual revenue of 37.1 billion yuan ($5.4 billion) for 2025, marking a 185% increase year-over-year, although slightly below LSEG's estimate of 38 billion yuan, indicating strong market performance but raising sustainability concerns.
- Dramatic Profit Increase: The company's net income surged more than fourfold to 12.8 billion yuan, slightly exceeding the forecast of 12.6 billion yuan; however, a notable slowdown in the fourth quarter heightened investor worries about the durability of its key IP's popularity.
- Underwhelming New Character Sales: While sales from Skullpanda more than doubled to 3.54 billion yuan, and Twinkle Twinkle and Hirono generated 2.06 billion yuan and 1.74 billion yuan respectively, Labubu and its family still accounted for 38% of total revenue, indicating insufficient market acceptance of new characters.
- Cautious Market Sentiment: Investors have expressed skepticism about Pop Mart's short-term appeal, with shares retreating about 50% from their August peak, reflecting a cautious sentiment towards the company's future growth, as the CEO acknowledged the need to diversify beyond Labubu to sustain growth.
See More
Middle East War and Rising Oil Prices Shake Stocks
- Increased Market Volatility: Since the outbreak of the Iran war on February 28, the S&P 500 has fallen over 4%, while West Texas Intermediate futures have surged nearly 40%, indicating heightened sensitivity to geopolitical risks, necessitating cautious strategies from investors to mitigate potential losses.
- Tax Optimization Opportunities: In a declining market, investors can utilize Roth conversions to transfer assets from traditional IRAs to tax-free accounts, allowing for more shares to be moved at depressed values and enabling tax-free growth during market rebounds, particularly for growth-oriented stocks like those in the tech sector.
- Loss Harvesting and Rebalancing: Investors can sell down concentrated positions at lower tax costs to realize losses and redeploy proceeds, effectively reducing overall tax burdens while offsetting capital gains, with the ability to apply up to $3,000 in losses against ordinary income.
- Employee Stock Options Strategy: A market downturn can provide employees the chance to exercise stock options at favorable prices, potentially lowering their alternative minimum tax (AMT) liabilities due to smaller spreads, but this decision should be made in consultation with financial advisors to ensure it aligns with long-term investment goals.
See More
